Investors warn that coal and gas funds jeopardize historic energy reform

Investors warn that coal and gas funds jeopardize historic energy reform

Critics of the proposed reform, including environmental activist groups and the federal Greens, worry the policy is designed to favor existing fossil fuel generators. Victoria said she would not support a reform designed to make coal and gas payments when NSW is open to gas but not coal.

Corbell said a capacity mechanism was needed to solve the “long-term problem” of attracting massive investment in dispatchable capacity projects, such as pumped hydro and batteries, which need to grow from a capacity total from about 20 gigawatts today to 60 gigawatts by 2050.

Federal Energy Minister Chris Bowen.

Federal Energy Minister Chris Bowen.Credit:Rhett Wyman.

Rather than include fossil fuels in such long-term market reform, Corbell suggested that state governments consider entering into agreements with power plant owners to finance their ongoing operations until they can be safely replaced by large-scale renewable storage.

The ESB’s proposal to allow different state-by-state approaches to the capacity mechanism has also raised concerns among large energy consumers and large power generators, who say a nationally consistent system is essential to reduce market costs and complexity.

Corbell said different rules in different states could hamper investments in renewables, while international examples of including gas and coal in capacity markets had “seen incumbent producers staying in the system longer than needed”, which he said “weakens investment in new technologies”.


Gas plant operators could be ‘paid twice’ if included in the program, he said, because their business model is based on operating fast-start plants that are only on. only at times of peak demand when paid at a high rate to provide capacity to prevent blackouts.

Electricity companies created havoc on the grid last week when they withdrew offers to supply large amounts of electricity into the grid, following the market operator’s decision to cap the spiraling prices that electricity generators charge for wholesale electricity.

The withdrawals prompted the market operator to use extraordinary powers to order companies to end their withdrawals and return power to the market – a process that triggers compensation payments.

Bowen will announce $45 million in funding on Friday for the Australian Center for Advanced Photovoltaics (PV), which he said was a “world leader in solar research and innovation.”

The funding was provided through the Australian Renewable Energy Agency to support its 30-30-30 target – to improve the efficiency of photovoltaic solar cells by 30% and reduce the cost of installing solar modules by 30 cents per watt by 2030.

Cut through the noise of federal politics with news, opinion and expert analysis from Jacqueline Maley. Subscribers can sign up for our weekly Inside Politics newsletter here.

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